Schindler Lifts (Hong Kong) Ltd v. Nikko Services Ltd
Read the full judgment text of CACV 250/2010 on BabelCite. This Court of Appeal judgment was delivered on 3 November 2014 before Lam VP, Kwan JA, Chu JA.
Civil procedure – costs – indemnity basis – gross sum assessment – non-compliance with court directions – late lodgement of skeleton bill – proportionate sanction – summary assessment – hourly rate – set-off – Court of Appeal ordered costs in favour of the Plaintiff (Schindler Lifts (Hong Kong) Ltd) on an indemnity basis in the underlying appeal CACV 250/2010 against the Defendant (Nikko Services Ltd) – court directed the Plaintiff to lodge a skeleton bill within 7 days and the Defendant to lodge a reply on quantum within 7 days thereafter – Plaintiff failed to comply due to a clerical error, lodging its skeleton bill on 24 September 2014 claiming $52,500 – Defendant appeared in person through Mr Lau, a director, and disputed the quantum, the solicitor's hourly rate of $4,500, and the necessity of solicitor involvement – Mr Lau also conducted a search of the court file and claimed a set-off for his own costs at an hourly rate of $3,000 – court adopted the proportionate approach set out in HCMP 2034/2012 and followed the English authorities Mitchell v New Group Newspapers [2014] 1 WLR 795 and Denton v TH White [2014] 4 Costs LR 752 – non-compliance with directions is a breach of duty under O.1A r.3 and a matter the court can take into account under O.62 r.5 – barring the defaulting party entirely from claiming costs would be a disproportionate sanction – the direct consequence is that the defaulting party should bear the additional costs of further submissions occasioned by the default, but a global assessment rather than a mechanistic inquiry into the precise additional costs is appropriate – hourly rate of $4,500 reduced to $4,000 even on an indemnity basis – court rejected the criticism that the work could or should have been done by a litigation clerk at $150 per hour – court found room for reduction in the time spent given the matter's complexity and previous history – court allowed a notional set-off for Mr Lau's costs of the court file search necessitated by the Plaintiff's default, but rejected his claimed hourly rate of $3,000 – final costs assessed at $40,000 payable by the Defendant to the Plaintiff forthwith
Legal issues: Effect of non-compliance with direction to lodge skeleton bill on costs claim · Assessment of costs on indemnity basis
Outcome: Costs assessed at $40,000 in favour of the Plaintiff, payable by the Defendant forthwith
Cited by 23 cases
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CACV 250/2010 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 250 OF 2010 (ON APPEAL FROM DCCJ NO. 1569 OF 2008) ________________________ BETWEEN
________________________ Before : Hon Lam VP, Kwan and Chu JJA in Chambers Date of Decision on Costs: 3 November 2014 ____________________ DECISION ON COSTS ____________________ Hon Lam VP (giving the Decision on Costs of the Court): 1.In our judgment of 15 September 2014, we ordered costs in favour of the Plaintiff on indemnity basis. We gave directions for the lodging of skeleton bill by the Plaintiff and reply by the Defendant to facilitate gross sum assessment as follows:
2.The Plaintiff failed to lodge its skeleton bill within 7 days. It was only lodged on 24 September. It was also faxed to the Defendant on that date. The Defendant disputed that it was not proper service. In the covering letter, solicitors for the Plaintiff said it was not lodged on time due to a clerical error. The amount claimed was $52,500. 3.Mr Lau, a director of the Defendant, contended that the claim for costs by the Plaintiff should be rejected due to the non-compliance with our directions. In a letter of 30 September 2014, the Defendant also contended that the hourly rate charged by the solicitor for the Plaintiff ($4,500 per hour) is excessive. It also disputed that the matter was handled by Mr Shaw as claimed by the Plaintiff. It alleged that the works were/could have been handled by a litigation clerk at an hourly rate of $150. It said that the total costs should only be $1,500 (based on 10 hours’ work). 4.By an earlier letter of 24 September 2014, Mr Lau requested to undertake a search of the court file. He also claimed for the costs for such exercise. He asked for an hourly rate of $3,000 on the basis that he is an engineer by profession. 5.A search was then undertaken. By a letter of 26 September 2014, Mr Lau reported to the court the result of his search. He set out his objection to costs being awarded due to the expiration of the time limit for the lodging of skeleton bill by the Plaintiff. 6.In respect of the objection of the Defendant based on the late lodging of skeleton bill by the Plaintiff, we respectfully adopt the approach set out in the judgment of another division of this court in HCMP 2034 of 2012:
7.We have considered the submissions of the Defendant on quantum. Bearing in mind that we have awarded costs in favour of the Plaintiff on an indemnity basis, we are still of the view that the hourly rate of $4,500 charged by the solicitor for the Plaintiff is excessive. We would only allow an hourly rate of $4,000. We do not accept the criticism by Mr Lau that the works were/should have been undertaken by a litigation clerk. But we also see room for reduction (even in the context of indemnity costs) of the time spent bearing in mind the complexity of the matter and its previous history. We accept Mr Lau should be able to set off a notional sum representing costs against the claim of the Plaintiff due to the search on 24 September (necessitated by the Plaintiff’s default). But we do not accept an hourly rate of $3,000 for Mr Lau. 8.Taking all these matters into account, we assess the costs payable by the Defendant to the Plaintiff at $40,000. It shall be payable forthwith.
Haley & Co for the plaintiff Defendant: in person |
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